Legal Issues Of Asset Securitization Bankruptcy Remote

The core point of asset securitization is its bankruptcy remote mechanism. Whether securitization can successfully achieve the desired effect depends on the construction and operation of bankruptcy remote mechanism. Bankruptcy remote mechanism includes two core contents:firstly, the composition of special purpose vehicle (SPV); Secondly, the true sale of quasi securitization underlying asset. The author mainly studies asset securitization bankruptcy remote mechanism from the two core contents.The paper consists of five parts:The first part briefly describes the meaning of current mainstream asset securitization, analyzes the various agencies involved in the process of securitization and their legal attribute and also explains the process of asset securitization. Introduces the possible risks in the project with the first thermal heat charge asset securitization project in China -Qian’an Thermal Heat as an example, to elaborates the main risk exposure that may emerge in the whole process of asset securitization. Discussion is conducted mainly from four aspects:firstly, bankruptcy risks of SPV; secondly, bankruptcy risks of original rights and interests holders; thirdly, risks in the process of the transfer of quasi securitization underlying asset; fourth, tax risks. The part lays foundations for the following risk remoteness.The second part, as one of the cores of the paper, focuses on the problems in the process of asset transfer of bankruptcy remote mechanism. Firstly, based on the legal perspective, the transferability of quasi securitization asset assets is identified and defined, which determines the form, deal structure, operation process, credit enhancement measures and risk control of the asset securitization business. The author explores the nature, transferability, legal attribute and modes of transfer of the underlying assets in details and then explains the meaning and identification methods of true sale.The third part, as another core of the paper, introduces the problems of SPV in bankruptcy remote mechanism and explains them respectively from its legal attribute, and the roles in the bankruptcy remote. At present, based on the practical application of various countries, company, trust, and special plan are the most common forms. The author mainly elaborates the three forms (company, trust and special asset management plan).The fourth part, take the "Freddie Mac, Fannie Mae", Enron and Lehman Brothers for examples, from the negative side to discuss the effectiveness of the bankruptcy remote mechanism.The fifth part analyzes the flaws in the asset securitization bankruptcy remote mechanism in China by combining with the current relevant laws and regulations analyzes and evaluates the existing relevant system and proposes tentative ideas and suggestions to improve the asset securitization bankruptcy remote mechanism and supporting laws and regulations in China.